Repsol Back in Profit on GN Sale

Repsol’s net 3Q 2016 income was €481mn, a reversal from its year-before 3Q loss of €221mn ($245mn), thanks to the €1.9bn sale this September of its 10% stake in Spanish marketer Gas Natural. 

The divestment generated a net gain of €235mn, Repsol said in its results November 3. The company remains one of GN's core shareholders.

Like other large oil firms, adjusted income for the nine-month period was down, though by only 13% to €1.224bn. Repsol said its January-September 2015 income of €1.4bn had included over €500mn of exceptional items, essentially arising from a dollar position that Repsol held after receiving payment for the expropriation of Argentinian firm YPF, which later went towards its acquisition of Canada's Talisman completed in May 2015.

Repsol said that its efficiency and savings measures throughout 2016 had improved earnings and bolstered the company’s resilience to the current environment of depressed oil and gas prices.

Repsol chairman Antonio Brufau (left), Bolivian President Evo Morales (centre) and Bolivian hydrocarbons and energy minister Luis Alberto Sanchez (right) at the signing on October 27 2016 of a 15-year extension of the gas-producing Caipipendi area licence until 2046 (Photo credit: Repsol)

Repsol's 3Q upstream loss narrowed to €28mn this year (2015: €395mn loss), but downstream earnings fell to €395mn from €682mn. Repsol’s nine-month refining margin indicator fell to $6/b, almost one-third lower than a year ago, although in 4Q 2015 this recovered to between $7/b-$9/b.

Upstream production in 3Q 2016 was 3% higher at 671,000 barrels of oil equivalent, of which 239,000 b/d liquids and 432,000 boe/d gas. Its averaged gas realised price was $2.20/’000 ft³, compared with $2.80 in 3Q 2015. Its crude reference price was $2.90 lower at $41.5/b.

Nine-month production increased by 36% to 693,800 boe/d, after the incorporation of Talisman assets and more output in Venezuela, Bolivia, Brazil and Peru.

Mark Smedley